Individual Essay Assignment Sample
Introduction
Family members play a significant role in the efficient management of family-run businesses. Family members are major shareholders within the company with holds significant assets. Financial flexibility is required for implementing rapid changes within the organisation. The operational processes associated with a family run business become critical as companies face legal issues in implementing changes within the company. Conflict of interest and problems with the company assets are the problems in family-run businesses. On the contrary, a relationship of trust with company shareholders and authenticity are several benefits of a family-run business.
This essay has been developed to provide an overview of the role of the family members in managing the innovation of a family-run business.
Main Body
Role of family in managing a business
The family members play a critical role in creating a sustainable business environment within the company. Following are the major areas family members took part in the company management process
Goal setting: Setting the company goals is critical for the sustainability of the organization. Family members provide their valuable input in selecting the company goals. Family members provide tier input in developing both long and short term goals associated with the organisation (Caputo et al. 2018). Walmart is one of the most successful family-run businesses in the world and the Walton family members are responsible for instigating the changes associated with business policies. The recent post-pandemic business environment has forced the family members to rethink their strategy regarding employee safety policy. The family introduced the Perry Policy to assist employees facing health-related issues (Talkbusiness, 2022).
Implementation of company values: company values play a significant role in creating a sustainable business environment. The ethical approach for implementing changes within the organisation is managed by the family embers to create a sense of trust with their company shareholders (Arsić et al. 2018). The segregation of investment processes are managed by the family members to ensure proper management of their organisational assets. For example, Walmart has tried to initiate a massive investment of resources across India to create a sustainable marketplace within the retail industry. Furthermore, the allocation of resources across the US retail, sector has been an area of influence for the Walton family members.
Areas of the impact associated with family members while running a business
Following are the major areas of the impact for family members in managing a family-run business
Supply-chain routes: The supply chain routes play a significant role in establishing an effective framework for company management. The family members are involved in the decision-making process for supply-chain routes. The technological incorporation in the supply chain processes is an area of involvement for the family members (Erdogan et al. 2020). For example, the Walton family members have been involved in the decision-making process of the supply chain routes associated with Walmart activities. The recent war between Russia and Ukraine has created major problems in the supply-chain activities of Walmart (Talkbusiness, 2022). The rise in fuel prices is creating problems for the effective management of the supply chain activities of Walmart.
Company decision-making process associated with the acquisition and mergers: Acquisition and mergers are an effective process for instigating changes within organisational activities. Major multinational organisations are involved in the business takeovers for instigating changes within their organisational management processes (Qiu and Freel, 2020). The family members are required to provide their vote of confidence in the selection of business acquisitions and mergers. Conflict of personal interest plays a key role in the business acquisition process as multiple family members can vote against each other proposal for business acquisitions.
Company litigation strategies: Family members play a key role in the organisational litigation processes. The future strategy of the company’s litigation processes are influenced by the family members.
Advantages and Disadvantages associated with family members in family-run business
Advantages
A family-owned business is always the strict source of income for that particular family and Walmart is that retail company that is structured with the help of a 50% stake of the Walton family. The benefits that this business could get from the family-owned efficiency are as follows,
Stability and trust management: Each of the individual family members has the ability to determine the potential leadership development over the growth requirement of the family business. The leadership becomes more longevity and assures the stability of the business on a long-term basis (Chirapanda, 2019). In a family-owned business, leaders are always become over the top position for many years.
Flexibility and authenticity: A better understanding of the industry and business history is associated with business flexibility for further development of customer relationships and growth of sales & marketing process. Most of the business-owned businesses are more flexible than any other non-family business because flexibility and authenticity towards the business management is the major concern of the leaders of a family-owned business (Cnossen, and Winter, 2022). This kind of flexibility allows Walmart to become a small store to the largest global family business. A foster of the cultural strategy and decision-making possibility has the ability to increase the family-owned business on a global aspect and this is exactly displayed by Walmart for long-term business management attribute that traded publicly and remains as a family affair firm
Commitment to long-term vision achievement: the leaders of family-owned businesses provide a greater sense of commitment and accuracy. This kind of accountability is needed for every effective business for better business demonstration (Mantziaris et al. 2021). The incredible understanding of the business growth and its history has become very simple to replicate the process. The financial understanding and encouragement with a fighting spirit have become more convenient for family-owned business structure. The owner of the business achieves long-term business goal management by demonstrating the perception of business commitment.
Financial rewards: During the economic downturn and financial challenges, the business development initiative of the family-owned business has tried to remain the same. In different times, businesses have faced several critical situations and for the family-owned business, this issue becomes proper business floatation (Peráček et al. 2020). Family members are always willing to manage the best possible financial contribution for maintaining the success in the crucial time as well. This flexibility allows the family-owned business to get back over their own feet and sometimes may be involved with temporary pay cuts from employees. Finance is the major concern for any family-owned firm for the long-term successful management of businesses.
Disadvantages
Lack of family interest: It can be observed that the pressure of family business is many times suppressed by the needs of the furniture generation of that particular business. Hence, it can be mentioned that the lack of interest in the family business can be associated with workforce inefficiency, worst structural demonstration, unenthusiastic, and disengagement consistency among the family members. In a family business, this could be more challenging when employees are terminated from their contract due to this kind of inefficiency.
The conflict between family members: History is always being repeated and it has been shown that the conflict or the rivalry among the family member in the family business could be difficult to resolve and involve with lack of productivity in the business sector. This kind of issue is very difficult to resolve within a family-owned business.
Structural lack and nepotism: People from the same family background always achieve ownership of the business even if that person is not suitable for this position. Organisational inefficiency and structural lack is a massive challenge at this time and even businesses can be bankrupt due to this kind of issue. Internal, external rules and corporate law are not maintained at this time, which can provide an enormous difference in the total business construction (Goel, and Bagale, 2020). When the right candidate does not get the opportunity in a suitable management role this is supposed to be known as nepotism, which is challenging for a business in terms of competitiveness and talent retention.
Communication breakdown due to lack of exposure: 62% of employees are provided their engagement in the business demonstration whether they are aware of the business succession plan (vistage.co.uk, 2022). Due to the inefficiency of the communication breakdown, this succession plan perception becomes inconvenient and challenging for long-term business demonstration. It is a requirement to take the daunting decision to mitigate the family member conflicts and develop an objectified business structure.
Effect of family members on company innovation
Walmart has a retail chain in the UK that is called ASDA and it is considered the biggest supermarket in the UK. The supermarket is the trending in every country and it is helpful for the people to get all accessories in the stores. The market is going through a retail supply chain management system and it is easily accessed on a country basis. Therefore, it is considered the traded own business that is controlled by the Walton family. The company is 50% dependent on Walton’s enterprises and individual holdings (Bratton et al. 2021). The supermarket is chief and applicable for the general people in the UK and it helps to attract the public of the country. The Walton is the richest family in the USA and it has a large amount of stake in the Walmart Company. The company is growing gradually, it operates in several markets, and it attracts the local community. Therefore it is the world’s largest company for its annual revenue and the Walton family’s net worth in Walmart is $238billion (Wahjono and Dkk, 2020). Accordion to the information in 2014 the company is a 50.8% shareholder of the Walmart Company.
The company has some beneficial sides such as are unable to hire a full-time employee, lack of medical benefits, and inconsistent scheduling that hamper the company’s reputation. According to the report, $2.7 billion of programs implement annually but they did not focus on their employee (Adedeji, 2020). The biggest challenge of the company is poor retail execution that is corrupt the entire system (Filser et al. 2018). Therefore, the family business is built strongly when the family members are included in the business activity vans try to up-after their business strategy. It is safe to work with family members because they are helps to make a trust, try to work hard, and modify the previous infrastructure according to the family’s opinion. Some factors affect the business research or innovation such as suppliers and competitors, legal matters, taxes, employment, customer activity, regulation, and the economic state of the locality (Werner et al. 2018). Therefore lack of technical knowledge and unable to manger the digit method in the business organization is rapidly affecting the business. Nowadays, a business is trying to establish a digital portable system that helps to uplift the company and tries to focus on the innovation part. The family business contributes 62% of GDP and there is 2.4 billion family business held in the USA.
The family business is considered the long-term development and creates a clear vision that helps to succeed in the business. A family business is considered the leading management and tries to understand the responsibilities in a better way. The important fundamentals in the family business are creating wealth, providing jobs, and connected to communities rooted locally. It helps to grow the economic state of the family and try to invest more in several departments (Adedeji, 2020). A business organization helps to create economic reorganization and tries to establish a strong digital infrastructure that is easy to handle. Therefore, it helps to make a good relationship with the family members and built trust among the family members.
Processes for mitigating the challenges associated with family-run business innovation
The topic includes a brief y description of the challenges that occur in family business operations with effective innovations. Various challenges occur in family business operations (Lashitew et al. 2020). Processes for mitigating the challenges associated with family-run business innovation. To mitigate the challenge in the name business there is a must need to the successful planning observation by the head of the business operator. This is necessary for the association with family to run a business in an innovative manner need to avoid nepotism. The member of the family is involved in business with proper attention to the goals of the family business (Lashitew et al. 2020). They must critically evaluate the business problems and the better methods of solutions to mitigate the market need and demands of the consumers.
The implementation of the business structure and system is necessary to mitigate the challenges of the family business operations. However, the systematic functioning of the business cooperates with the employees which lead to the better performance of the business and value customers in the markets (Jones et al. 2018). Always good cooperation is mandatory for the challenges in the family business analyses the groundwork level of the employees and motivates them towards the goals of the business. The business operator needs ethical guidelines for their employees as well as established rules and conflicts around their work. The planning requires future analysis of the business where people enter and leave the business.
The report critically analysed the process for the mitigation of family business challenges is to involving next-generation early. Because the modern business strategies are overcome from their perspective and they easily analysed the modern market with their experiences. They are very efficient and energised for their work as well as the new strategies work as innovation in the business operations (Kalkanci et al. 2019). Another process to mitigate the challenges associated with family-run business innovation is taking specialised consultants. They are the observer of the business performance of the whole activity of the family business. The specialised consultants give suggestions for investment in the business. They critically analysed the profits the business and might also losses of the business. The most important work of the consultant is to keep a record of all the transactions systematically.
This is ascertained to mitigate the challenges of the family business innovation by the distribution of ownership decisions between family members. However, the distribution of ownership reduces the workload for every part of the business (Rosca et al. 2020). This helps the smooth functioning of the business and the employees (Gosnell et al. 2019) do the completion of the work effectively and efficiently. The distribution of the owner allows the smart watch of the business activities by the leaders. The leaders might easily supervise the work of every level of the employees in the business. However, distribution of ownership elucidates the various depart of the3 business activities and finds effective innovations in the business. This also helps the communication with employees and listening to their wants and needs.
Conclusion
It can be concluded that this essay has been developed to provide an overview of the impact of family members on organisational business strategies. This essay has mentioned the role of family members in the effective management of a family own business. Company decision making-process, litigation strategies and selection of supply chain routes are several areas of impact of the members in the management of a family-run business. Business stability and a relationship of trust have been mentioned as an area of advantage for families involving family members in the organisational decision-making process. The conflict between family members and nepotism are described as disadvantages associated with family-run businesses. Legal matters and regulations associated with innovation are managed by the family members in implementing a sustainable innovation process across the organisation.
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